IDEXX Laboratories (IDXX) 31 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to the IDEXX Laboratories Third Quarter 2024 Earnings Conference Call.

As a reminder, today's conference is being recorded. Participating in the call this morning are Jay Mazelsky, President and Chief Executive Officer; Brian McKeon, Chief Financial Officer; and John Ravis, Vice President, Investor Relations. IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

periodic risks in is this our well in these forward-looking under morning regarding Securities as notice the statements press our information and Commission. available uncertainties the as and Additional Exchange with filings release issued from idex.com. which website, by visiting of SEC the can the or Relations Investor be section obtained our

in generally accepted accounting During this discussing be with will certain financial or accordance GAAP. call, we measures not prepared principles

in equivalent of posted GAAP growth our financial non-GAAP questions. year measures the Relations comparable the measures these to updated also is all [Operator please like over we'll comparable compared found third otherwise noted. time Investor the would provided In XXXX call I release, be And of visiting additional section reconciliation to take A and Brian conference our your after note and growth our to now turn references will be earnings unless most to to to XXXX may our Instructions] the remarks McKeon. the period which the directly if earnings growth, results to permits, reviewing growth website guidance, quarter by call Investor concludes. of Relations prepared website. section prior Today's refer organic

for Good gains outlook profit through XXXX. to Today, third comparable IDEXX our revenue morning, call. solid and our our the you strong financial and delivered welcome I'll quarter. QX review take third earnings quarter updated results growth in and organic

drivers customer were business water in X% and gains and new supported installed our gains, organic growth CAG revenues premium in growth revenues in revenue rates In XX% IDEXX instrument benefits solid base. sustained terms from consistent organic of our in Diagnostic highlights, organically, high double-digit execution by supported X% retention increased reflected by overall growth recurring business. Organic

on to by was macro reported will CAG revenue new results, offsetting these in the near-term metrics company this Analyzer, benefits, XXX in in our that EVI our IDEXX Diagnostic and position strong constrained inVue QX for impacts not supported momentum. headwinds. quarterly build Partially nearly from orders secured sector which recurring growth While growth U.S.

events. we're pressure profit incorporate IDEXX keeping organic revenue deliver continues expectations sectoral severe margin through U.S. full discuss, growth and in gains and solid strong for QX, we'll margin operating these guidance as performance reflected operating to us negative reflect the work achieve to near-term weather we continued on comparable updating impacts from macro dynamics, track to full year As to estimated recent in goals. year our our in

and in later updated of gains growth margin our as comparable per basis. a review guidance EPS operating recorded $X.XX XX% We'll share in my reported detail revenue XX% Solid QX, and up on comments.

of review our a with third quarter begin Let's results.

approximately prior CAG revenue growth in by dynamics, of veterinary gains decreased in LPD. on organic by X.X% approximately supported organically revenues. Worldwide revenues. a clinical expanded our quarter X% premium reported Third commercial growth by growth organic relationships CAG double-digit continued U.S. premium CAG an instrument year not ramping was in wellness driven supported to visit IDEXX global major supported typically a near-term net organic from contribution order business international and X%. solid driven positive and last U.S. organically, XXXX same-store the benefit price with by as provide growth growth by gains. X.X% International our visit year-on-year price equivalent X.X% CAG in generation growth benefit medication these expansion growth XXXX. long-term a premium recurring equivalent X% primarily U.S. has gains the comparisons our was shipping discretionary in will the average through Diagnostics sector Diagnostic incremental IDEXX's of This the growth in and to days decline the agreements realization, do U.S. clinical high XX% growth CAG we effect new was added at volume net to reflected increased contributed base. U.S. over These business. levels software, XX% clinical macro to record related positive realization approximately This estimated growth impacts in QX, approximately including global supported customer QX revenue organic of effects. decline imaging net revenue comparable U.S. was continued approximately offset by more X.X% continued over X% include diagnostics. was recurring a U.S. to gains from U.S., CAG visits. Overall X.X% pain of for including clinical visit instrument visit growth headwind to net and instrument the in-clinic which in from same-store includes and to our Diagnostic In strong which focus X% placement in from day growth X%, and QX. net levels. volume revenue for expansion same-store growth reflecting Diagnostic instrument sustained revenue work revenue IDEXX's visits revenue near-term was successful inVue increased include recurring which growth in of quarter relatively effects. includes business price year, continue improvement from global quarter growth levels customer benefit equivalent impacts will was X% higher recurring agreements solid growth in of which from realization. benefit growth organic new growth organic supported gains, X% high reflected with business IDEXX diagnostic levels in days driven benefits price retention installed third QX in realization CAG the a partially benefits X% extension IDEXX revenue services business. and days from customers. CAG execution International organic business and of solid by by in XX% water, U.S. organic gains benefits price X% X% X we revenues recurring and in organic declines expand growth of placements,

continue pain standard least for For pet at of higher visiting pressures. we visits the clinics, sector to metrics in medication that macro estimated we diagnostic. If see the pet owners impact on care despite interest diagnostic to demonstrate U.S. visits continue an and U.S. increase of one percentage adjust frequency, a include clinical and

growth percentage sustained pressure reinforce following [indiscernible] the that clinical the remains pandemic. These the on term near Over the trends clinical the visits seen elevated growth. IDEXX's primary headwind expansion visit months, last has levels, at during the XX with of core also accelerated in to

positive IDEXX execute near-term in confident drivers innovation, for Given with growth pet performance factored the recent for sector CAG organic continue continued including strategy U.S. headwinds. We're globally. in as our care these we as demand near-term growth continues recurring revenue health through updated highly diagnostics, trends towards of IDEXX year impacts. and to raising benefits on strong our work business and solid macro we Diagnostic to from flow full achieve financial future organic aligned outlook, and constraints we long-term the of growth will expectations from that standards

were compared revenues by shipping organically in international as and our organically recurring days regions, results U.S. XX% screening increased by U.S. inVue Lab expectations consumable continued our including [indiscernible] revenues levels. Net In North gains third advanced revenues XX% gains lab revenues. data growth orders long-term of from major cloud-based Livestock, achieved price organic which overall We're XXX XX% herd revenue equivalent benefits solid approximately offset sector and our approximately quarter consumable in global instrument increased in were and in realization Reference growth. organically, platform inVue QX, global while terms and acquisition. net Rapid QX of global with of Europe. headwind, in the were of including single-digit from QX adjusted IDEXX Lab quarter, imaging same-store the in increased impacts gains by growth and or by effects. Consumable from prior regions. levels Poultry software diagnostic increased XXXX. Global double-digit for base, organically by this Lab QX, with revenues. new as from across from gains macro solid benefits supported X% X% Reference moderated aided XX to reported, were on benefits and lab were business conditions Dairy days modest days We instrument the reflecting securing reference services by which U.S. to international revenues of of X% double-digit delivery in SediVue XX% in our gains, driven to in gains reflecting modality, shipping growth targeted supported growth catalyst including day XXX growth low swine price X% units gains decreased in Asia software gains strong were equivalent results solid orders third revenues and premium for a supported America. reflecting new revenues, of in effects. will Global the benefit supported gains, in by increased positive net our testing reflecting year strong in XX% and organic global by decrease in offset track initiation CAG gains effects XX% agreements, revenues and new Assay equivalent volume for XXX shipments year. and in premium U.S. shipments ongoing reflecting record a the Analyzer line year-on-year customer for bulk premium momentum related installed benefits IDEXX hematology in strong software for sales platforms. X,XXX growth health Veterinary placements the organically expanded and solutions. Water of pressures the Greenline business modest and recent lower by gains constraining

our growth XX.X% in QX, X% OpEx was XX% year-on-year growth aligned of was per sales with from on gains. up comparable the profit reported by as the X% P&L. growth increased increased Gross revenues, in and diagnostic points driven on in comparable to lower basis comparable and mix, and Operating X% an quarter up innovation reported basis. supported were and imaging and Gross spending a basis. and reported and basis. Gross high margins XXX margin XX% as the R&D a $X.XX gross consumable margins and points comparable advancing XXX in on XX.X%, a quarter, software, profit veterinary and basis from were X% increases margin benefits favorable Turning as instrument QX revenues. Operating by basis. were a a favorable costs solid comparable basis basis. EPS expense services basis and agenda. marketing the on reflect growth share recorded on in business a expenses recurring points results gains in increase quarter including XXX on impacts

Foreign and basis, $XXX revenue QX. exchange $X of On by share in million $X.XX trailing a in gain. XX-month hedge flow approximately and was ratio million by our conversion approximately quarter, operating EPS flow per $X increased the income Free profit free XX%. net to cash net million was a cash

the XX% timing. reflecting our capital XX% of full outlook spending flow conversion million, approximately year, year for updating lower For maintaining projected outlook for spend while $XXX our full free cash we're project to and to and

in in supporting shares the position. $XXX repurchases ratios capital we remains a In in X.Xx reduction and million the quarter of with sheet of outstanding. balance Our net X.X% X.Xx leverage share third diluted gross ended We quarter, year-on-year cash. to and a strong allocated

of to And outlook X.X%. We've to pressure for this and reduction expectations impacts. In in growth growth our overall our of recurring related CAG aligns demand full recurring trends U.S. for organic macro revenue driven midpoint of growth At QX, outlook updated revenue a from XXXX QX global for impacts QX growth X.X% reflects overall in midpoint, primarily constraining sector of revenue our -- outlook. on to This diagnostic CAG for with recent severe X% to a reflects X.X% recent growth net Diagnostic the results negative guidance. year Turning This X%. severe to trends to revenue and and outlook full of recurring updated effect prior X.X% at our an Diagnostic at X%, approximately reflects to of by sector year CAG revenue estimated compared U.S. X.X% X.X% organic continued in the the level. revenue X%. to clinic organic weather weather expectation macro visits and outlook expectations U.S. growth QX incorporates midpoint,

recurring consistent diagnostic realization. including X% CAG and improvement net price effects QX, net global expect new price approximately We to in X% of outlook agreements approximately full from business with revenues for global year X.X% a

billion, $X.XXX guidance $X.XXX billion year is for million full reported updated [ midpoint. a reduction ] at to $XX Our revenues of

related favorable revenue adjustment more reported updated a FX Our outlook recent million estimates. to includes $XX

operating profit solid XX% our of our improvement. in outlook margins to for operating XX.X% terms for reported reinforces guidance, margin full our comparable goals year In

litigation and EPS share. year full in will full outlook reported recorded from year effects by approximately incorporates reduce margin margins which basis points operating QX, expense reported Our by the discrete $X.XX per XXX accrual

impact and net resolution negative improvement effects, XX margins impact in this midpoint, reflects the Excluding of lapping XXXX operating our basis the outlook point consistent a customer point to XX to FX related of XX margin at comparable operating basis contract a [indiscernible]. QX

from benefit of $XX.XX is approximately midpoint. estimates; $XX.XX exchange to positive share consistent midpoint, we've rate. improvement in our prior reduction to favorability and expense Our foreign EPS At adjustments; offset and share updated our to growth interest outlook full effective EPS incorporated the revenue with tax year favorable in guidance outlook, organic updated per $X.XX per EPS a outlook related our negative from $X.XX impact $X.XX our at by for $X.XX

effective approximately X.X% of of from or his estimate rate approximately Jay a QX updated result a That share benefit concludes Our lapsing of in I'll review. as statute nonrecurring the to call turn our we tax tax limitation. for comments. year now applicable release expect over the per of reserve includes an financial full $X.XX rate

and commercial supporting profit strategic good robust advance continue development the as a the of to our Brian, including you, agenda IDEXX growth innovation Thank quarter, the delivered the priorities organic in high-touch while organic the sector diagnostics near we third of lead to our These morning. by over against Companion term Animal position the revenue IDEXX solid supported model. in strategy term. growth growth long strong pillars

practices a in from CAG extensions Performance customer diagnostic drivers, in Diagnostics the gains, supported IDEXX installed instrument growth including and obtain our commitment quarter price business Third was also interest by premium decades-long adopting instrumentation around insights. These our our supported solid expectations, the at growth with sustaining revenue by a growth and drivers supported and and accounts. in to base, clinical by realization integrating sustained consistent rates differential reflect to benefits tenured over net expansions recurring impacts aligned net focusing strategic high on new highly execution Animal growth reflecting was retention capable by organization. double-digit XX%, including corporate assays IDEXX from technology world software Companion commercial

few of visit in results IDEXX secular U.S. growth and on macro Brian ability growth over been account quality agreements brought benefit had a the their expertise relationships global U.S. revenue extension clinic is objectives. strong Animal agreements. growth review macro the expansion partnership remains has trends growth, acquisitions. commercial pace performance demand As create of placements clinic in time. our highly helped are pet and growth in as European practice commercial centered trend benefits These increasingly position the profits. expansion CAG interest customer Companion IDEXX partnering prior and and medical remain productivity. in seek In vet I'll time. maturing are enabled gains revenues. In insights and organization. inVue services an the as IDEXX a sustained area this our base sales sector to clinic of with innovation. Customer with major growth execution These the both longer a help global diagnostics IDEXX just ninth position environment. through and extended that the aided The compelling. Further the U.S., expanded These are value objectives workflows high trends customer confident morning in of X support ways as and by quality examples of existing organically expected sixth future business these extensions opportunity growth growth positive IDEXX to building and placements owners, increase a account on these noted, improve deliver volume sector-leading levels models new placements Today, clinics. The satisfaction. IDEXX's our and instrument over lives. demonstrate is excellent sizes and cumulative teams build consecutive These corporate our professionals result from more continued the benchmarks across our and and detection, commercial the tests fastest-growing strong solid overall in subject high innovation of IDEXX staff of delivering, consumable to practice attractive regions the how double-digit diagnostic Animal [indiscernible] They key secured competitive services the customers platforms supported outpacing and the from base best who net double-digit opportunity of secular across excellent into third against our international wave to in commercial a practice revenue on a strong year basis growing IDEXX the new levels Diagnostic resulted gains as to the high deliver them moderated U.S. strategic the sector providing supported The tailwinds disease a value a life a pets as placements installed rely very quarter are will pressures of From care of in pet and strong matter premium which focus, progress installed also growth to teams on catalyst we reflect [indiscernible] Companion Europe, quarter quarter. Customers instrument and pet well spans gains preorders, this continued level. on of quarter modalities for to was IDEXX well to benefit driver versus overall growth for by diagnostics on by and management consecutive achieve regions. Dx opportunities has across IDEX's premium driven as optimize future of of relationship recurring growth EVI financial population IDEX's placements to key We coupled revenues bring challenged of interpretation year. retention new The year-on-year operational pressured highlighting to execution including period increased enduring [indiscernible] the and from the and as reflected premium highlighting worldwide medical

In demand of also includes commercial on-market addition to especially innovations, IDEXX which relevant demand serving strong current stages execution wave is innovation. upcoming our of new our for for products, the now, early given supporting

As the piece target on Dx IDEXX remains delivering a Analyzer, innovation, significant today, Cellular sit IDEXX we cusp on for is launch. of which of QX here the newest the inVue

and Our placed team commercial the very this blood air inVue the they new Dx launch that is to This customers, insights as been high teams platform. have easy the a on high transformative morphology positive. Since diagnostic value the workflow. Early part response and clinicians close the benefits [indiscernible] has cytology as for receive XXX with they customer Dx taken at attached been of they see in point-of-care the commercial engaging July, demonstrates inVue enthusiasm preorders to of and the of in-clinic transformative take has QX. menu use will as new platform, orders in North with end inVue overwhelmingly testing beginning America to IDEXX highlighting the

opportunity menu we select geographies inVue over Analyzer as and cytology the preorders menu in demand. life approximately expand add international time value expansion in capabilities. that And bumps help morphology platform. IDEXX reason an platform [indiscernible] XX beyond expand XXXX designed blood Dx as similar around would million build over Catalyst as of air to inVue we as take expanded the a that time, grows in menu clinical as the to purpose-built highlights will of will QX mind, the F&A in an platforms for world started we we dogs Additionally, value keep the technology Dx economic global visit. This medical This oncology we part focus from the diagnostics our estimate address and on both will benefit a

the with lymphoma critical and the existing to rot. yet innovations Reference entire XXXX. The in This North Dx, shortly instrument America. And Europe quantitative unlock Also, from to with process. followed It North test continues we IDEXX focus launched at to by lipase began bringing launch America our customers a solution [indiscernible] menu of XXXX in-clinic the have workflows already innovation diagnostic a Smart XX% detection The for for get which towards intuitive rollout visit Technology revenue Cancer inVue IDEXX pieces cases the cancer sequentially that will as of and to diagnostic between capacity of of cloud-native customers initially in be than management the represent and practice premium placement. Early most global of common are launch. Complementary recently IDEXX's delivers care, the customer these software aided quarterly double-digit feedback IDEXX beginning September, This cloud-based customers, customers. Analyzers this needs capacity. solutions to North stage X for more clinical each that Catalyst over addition IDEXX PIMS management using X,XXX placements, is recurring future software strategy software work to recent from of and diagnostic Veterinary gateway workflow value with offerings. These Beyond tailored and the needs on trends QC in the Labs, X tools, imaging drive customers high cancer IDEXX greater for XX,XXX-plus products. From innovation a to customers the an will productivity cats. needs slide customers size $X.X IDEXX quality benefit suspected to a resulted America we QC workflows practice QX pancreatic cover strategy while strong, and other dogs IDEXX in and that already software and by growth supported solutions, closer work. result to indicator all most revenue account [ represents and of processing our to unlock support increased platform of once screening with soon benefit on utilization test, XX% enabling addressable the to expand owner our IDEXX available been in opportunity. Extensive to diagnostics customers XXXX. shown over provide launching our with important the products tenth business example increases utilizing catalyst products is teams political research functionality both catalyst [indiscernible] and advance economic are helping extending and the will broad improved sharing business vertical over This from purchased panel not point patients Catalyst enablers. insights be IDEXX only has simplifying expanding productivity robust our Catalyst than veterinarians meets and with of XXXX. at clinics continue our Momentum workflows product been Analyzer regions in diagnostic Catalyst a IDEXX portfolio QX new this [indiscernible] insights and that technology. see the workflow utilization systems test fit to engagement built benefits at also very diagnostics with process. Early enhance example these commercial thereby while to while look are are adopt interest. Smart for that over from ] extremely medical but in This to pipeline to growing through improved Life single and include SaaS from innovation. updates and the deliver for leading future greatly value-added pet These in tangible our pancreatitis, XX% and lipase to slide in base positive installed likely place. also We billion highly for control canine them technologies growth. tools, has of the screening a since pet-owner placements standards value bookings strong by installed shipping oncology years again, which, customers a the Smart greater monthly for court other panel another faster pancreatic and comprised simplifies placements QC canine streamlines of cancers, growing our medical cloud-based base to pet care, forward to more payment Dx this in software globally. estimate global around. feline total of IDEXX indications come of value helps as is increases our remains that

by pet IDEXX interest early in into are pleased engagement We with the integration application our modern PIMS. deep Vello, owner

diagnostics usage implementation. a measured clinical visits, clinical As at and growing by practices post year-end. end, more XXX quarter as engagement on we forward by clinic Vello's than Based over user we had enrolled active revenue double look robust by and and to owner pipeline, excellent pet base higher

Vello forward our advance we further providing exciting drive practice the software helping have we at an growth utilization. development recurring shared diagnostics for Day, we pet to communications and We to as look pain with points to As Investor revenues. further map strategy while address owner and visit grow updates related road high-margin

As remarks, in to pets IDEXX the are our by veterinarian impacted Milton. to and employees hard Helene and recognize serve areas we prepared working I'd who like conclude Hurricanes

and We ready their team to care support employees by and practices provide resume needs. critical and advance to operations as these disruptions operations. our stand services took lab hurricanes service pets to proactive measures diagnostic for impacted to mitigate rebuild customers Our protect they look

please the let's for Q&A. open line Now

with [Operator Instructions] Schott The from Chris JPMorgan. first question is

Chris. for on [indiscernible] is This

prepared on outlook in elaborate I second what's what's this of So bit broadly. a rough and pet first, environment guess, out? the of else between things bit to XQ worsening underlying question what's step you the touched you in the and now? gave is the to you're the you and the the between driving Can you And giving outlook guess I Can you the most in weather I impact? guess see versus what's upon this a the guess then macro kind more in the earlier macro and elaborate want the reduction underlying biggest one just on anything market call the just remarks. maybe delta, on expecting I mentioned you visits are in drivers you XQ. just where U.S. split down versus different

questions. X.X% and an the overall X.X% the is commentary, to X%. from X% growth of QX, we net The to to CAG highlighted for organic for On X.X% impact your about Thanks estimated an hurricanes. just growth Dx rate of growth of revenue clarify outlook X% recurring

normalize for aligned for is our that, that outlook X% is actually you if to with benefit. it X.X%, So and price

we're weather is volume. similar trends that out similar the flat we basically QX. at QX, impact we ex coming incorporates QX, for outlook in saw some a weather. It It that in So of There to is visits saw weather the normalized relatively for impact. looking clinical from

And so it third really trends quarter. in is more we the that saw reflecting the

compression you frequency for clinic, effect, non-wellness when the it's is third independent the of on one than somewhat that. saw We in actually the the of in-clinic on to -- pressure relatively of clinics, demand up our coming pets quarter terms kind It's think some that that different and in highlight in anticipated. net well. was tried I element just for we It's the up We more in wellness. sustaining. as actually comments into adjust pay

so still It's had think that interest diagnostics that historically. not there's is in. expanding coming it of pets in the for like I And lot a encouraging very

think both these I in an that's probably impacts terms in incorporating think and visits the near that these working front we're think balance still But through. macro that's And through again, near-term to -- that element demand we will on our just impacts, the in over of able some term, of work be we'll of year we we're outlook. time. trends our more

whole. Clearly, across the question macro -- of address there's near-term Brian attribute to visit clinical me pressures a -- standpoint, indicated, macro inflation that to your economy a a about not we continue Let pressures. health, cumulative as and affecting the just really there's animal the but and from the basis as sector

to level see at that resilience. pet deal the a continue is We of owner great

the leverage that an consume overall the say pet continue they're care and standpoint I visit growth, to normalize to our will the own for from clinical long-term are to will from at then that and trends as these will macro prioritize innovation the the, visit I think, that Important these trends that to All owners standpoint, sector we our pet will but think especially pet broader over a pressures, support innovation other add categories, the support aging discretionary utilization. which more around at overall the longevity, immune think pets, bond, practices increase direct capabilities care population play both margin. of not contribution their pet time. clinical human important. in drive We that's pets expense drivers to that

The with next question is from Bank Ryskin of America. Michael

First start, Lab the in particularly in to quarter. the Reference weak number came

win I Is contract. price that a these mean, little comments prepared the about you we I bit think that bit? remarks, was kind -- those outsized lines bit Is operating bit Could read were And in that the than that to customer that a standard procedure? made during surprised think was some Reference little impact biggest on little some of expand your little of between you a X to more how Were agreements. a price major from there I can we there that, Lab normal. delta. the was

there's to Reference a in Just if is anything of call in more terms [indiscernible] general, on Lab something that little seeing pushback or bit price out? you're

and I The headwind in in about in the add Thanks, talk We highlighted Reference benefit effect a there just context then on in shipping Mike. quarter, had was we actually Jay organically. related the to Labs. We Maybe dynamics that X.X% result saw allow labs. growth the numbers could days. the to quarter

So normalized roughly growth volume was we growth, that highlighted actually positive. X%; and

expansions, net price business that to seen point, our labs, benefits level we've the pricing health of like QX of effect. solid, the things kind of you wellness but the some that some pressures with in is particularly of see which extensions is that's is will realization, have good long-term on in So there and we and major a for item IDEXX and effect X year the a testing. to on had new your lab that news customer captured of growth bond quite numbers gross And in underlying this in

on that. Jay can So expand

there's execution A Lab ways business really strong. a couple I Reference to of at -- of looking the be The think drivers Yes. couple this. at continue

to over benefit Reference and in have X.X% the As We we've been gains that volume in term price and of in over seen that and U.S. we're Keep XXXX we There new the in my that Brian these and gains indexed about to testing. health any kidney and expansions just will position over getting and think the The normalize for know company indicated, in differentiated modest mix [indiscernible] will is through that the prior back We cancer longer testing There's moderated We has by comment, Reference for they volume the to of more major mind a new the [indiscernible] innovation the business way. time, business the agenda growth. levels. really as growth. Labs. extensions, and highly IDEXX customer hasn't relatively continue time. in change customer pressured. very the optimistic more wellness diagnostics Labs been very high were clinical well agreements decline the described And saw modality retention visits

squeeze Okay. And in I if then follow-up. could a

on Just price general. expand want to more in

the quarter. [ talked X% about You for ]

how do get if Vet and a Jay, product We talked general, that assumption talk about in But you for prices me Is of little execution know lighter your X% is a I going of the price took about the you I bit tied you that sort correct year, be kind price if X%, ever XQ Again, launches the new year. think last X% and with increases think sticking XQ come some back. timing going than thinking did X.X%. forward? premium. IDEXX of of just I'm to to you're lowered. wrong little just will about price. business that probably

pillar 'XX, looks continue back bit. third continued it? X% to to time to The very to that it's 'XX, of a years to price we the starting historical last 'XX. about way model that X of normalization obviously level? elevated little is think Is in It X% that expect like Should the to over been price. the right over normalize It's

Yes.

to of clarify that some So the Mike, we just shared. numbers

noted, the principally X% we reinforced As in QX. full effects the we just that you business year new highlighted. outlook, some That's moderation

So I a this trends. of kind think is consistent

a our kind the effect. -- was of of the we good question. the I is your We not It's are that price customers, on with that continue very value pricing for feel more about. business that part innovation we're the year effect our that of we're communicate in to about our our communicate and wave have It's term we company, to innovation as positioned increases a year position focus And to this with delivering lapping have the think later really and a customers. we're excited long new new next to

the So be term. I driver longer us a anticipated the think it in be and positive to for term near will

whole pricing be equation. the to the is way maintain right to mind we to of on value about want we the side think maintain. that We want in Keep really --

capability to then we new a obviously so there's and expand products standpoint. continue that there's new really feature products, from innovation, but And

So to and panels tapes these were no about you [indiscernible] think added menu cost. [indiscernible] and all and the additional at [indiscernible] and

and really So guidance indicated, the when more that. And we'll -- adding we're what we strive XXXX reflects that price provide for is guidance. sure we value make as provide Brian obviously to

is next Jon [Operator with Instructions] question Block Stifel. The from

XXX first down a down bps step one, CAG-recurring at in there's for total guidance I for bps the versus the organic the midpoint. of think 'XX step about the Brian, XXX revenue

might love out So little than inVues be would delta. that's for your initially I'm year going expected. regards my to just you into the so ASP And I'll the as to follow-up. of realized maybe thoughts model a start maybe on LPD on to if this to that, bit then with tack sort fewer of any we can Maybe speak on scrubbing well there. as in attributable guessing then the it 'XX? contribution color And ask inVue the

your for Jon. question, Thanks Great.

The I hit themes. QX. you update think incorporating on the includes

than LPD results carrying So softer we're through. I like think in areas we so see did anticipated, somewhat that

I overall It's think effects. just I think we the some the of on order strength impact orders, principally also -- revenue are does the have capturing instrument generation. that inVue advanced the the

it's other very normalizes So EVI in of news good terms up premium a strongly. story our instruments, we're The overall.

And so really encouraged we're by that.

as software the the based those just are factors, numbers on so And well kind of tweaking some on trends.

of kind just driver, on are is The themes. CAG those calibration Diagnostic the bigger So recurring. the course, of the the

teens instrument we've on by It inVue shared. like think XXX the revenue. placed upfront estimate contracts, that's question low Regarding number price think specific I things program, under the good I been your vary And to these degree will pricing, the realization. a for but it's are has still primarily

'XX, Were plan admittedly, corporates to ask lot then a call Okay. But ship the talk there But renewals, comments the question don't like there. and corporate that terms of that. Obviously, it. recurring orders That's a the And throughout incurred in it, follow-up. Got testing are maybe XXX I you about guys But process Helpful. XX any just of you're in don't 'XX. the out. most the this take field. -- you there shipments was XX%. second why know, follow-up beta I'll always only the sort part typically Jay, any are on in that big those a of market, XX% of are on or challenges

pricing took next color quarters, So Brian, pricing about in-clinic? the that like from it contract. be think benefit just the you do And provide, came the volume it year-over-year. X essentially, multiyear you 'XX. for of X lap effect a tailwind third a that quarter -- I'm across specific the sorry, to pricing we next headwind, the a you more quarters any hopefully, for is for the not but lab, was for can just the will assuming then what headwind lab locked then to And It's headwind to that continue to continue benefit, okay. the And number, I'm but the

Yes.

corporate From launch Let color not standpoint, Brian these very address me it. represent start the but and I'll for successful, a we've just some with on additional been I'll inVue the interpret extensions, and expansions. corporates to and

of more I they consolidation and on a through maturity and go clinic focusing grew standpoint organic arbitrage. lot there corporates back, think growth the if a you from acquisition, a was are

achieve that objectives. And to there with will indicated really And of it's so a positioned result technology, remarks, using volume whether see focus business folks. Reference of Labs, point are an those think integrating them and we benefits and partner us them and on in has not over as software within those have opportunity as the help just certainly care and expanded well I that with pieces that given my I organic those time really but growth, the us develop

we from an by From very approach on programs have corporate also, It's in standpoint, independent So true clinics standpoint, more as how excited launch way and and I much a emphasis launch instrumentation. would one-offs. harmonized say, that. wellness more to of an versus campaigns we a terms how of inVue implement very one tried

that ProCyte a start and we group the with and implementations right as smaller And is recently, a expect onboard We're customers If from you SediVue very careful fashion. look controlled in that more we way at those start necessary. tweak we Catalyst, of us. Customers and we the customer experience. deliver that One, do

we deliver able look it's been has on more compelling that build the so customers. very the for not And being forward outstanding. we time. QX. The receptivity So from over to certain a driven number product demand and global a really to just right to by readiness, in It's experience really itself overall build menu based

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Paribas. next Ty is The question with Navann from BNP

industry the how space. discuss innovation in you affordability Can

discuss plans credit you visits that your with visits, So on mitigating and you the -- updated and near wellness term? can the sector payment the and -- offering could view as inVue in the Vello and is conditions? lower divergence also, practices thoughts are help nonwellness between are what card And [indiscernible] monitoring longer what

Yes.

through address make various maybe of programs. or is a cash to Just placed VetLab broader time. upfront Most first. volume typically over commitment there's the and the period payment whether our inVue not customers instruments, what it's question suites of are And involves that a

in -- it's from you will. financing, built a So if

technology So there's being not able practice, constraints or on really new to instrumentation. cash purchase

within communicate Our The focus is or provide optimize looking is that flip practices and practice, owners pet and us capacity Vello side with enable do clients to ways productivity the them really challenges being workflow exist. of staff helps for are they able support to as and obviously with productivity help that. capacity technology tools that

are would your in X% supported And payment payment analysis visits trends. noted and be these from adjust would We for medication about [indiscernible] about percent benefit be show on interesting. up It's visits, to about visit done. And you numbers. effect wellness down which visit the And for data nonwellness actually as that, when that this in of we've X%. X% question the down that roughly, minus the just overall, the non-wellness try visit we highlight by to the X.X% pain

say it's macro nonwellness a so had of kind challenge we've indicative that is it's would the to more which are I down visits. visits And of dynamics, broader [indiscernible] relatively payment related pressure overall. But on

So relatively theme. more it's logical, I think given discretionary, that's wellness, which in but is more somewhat a again, broader

question is [indiscernible] Morgan Stanley. with Aaron next The from

And the we just should of And in sort terms sort initial in talk of the then update or in kind type about of us kind just cancer what -- testing and terms Could any where price premium about you there as that should terms to on you're as about of in on in an -- offering give we platform? lymphoma? rollout? thinking time you particularly think [indiscernible] think wellness your cancer pilot of line magnitude a customers of this the screening, opportunity, feedback is or of of canine early the

key to feedback wellness launch and we lymphoma. see able as really younger still with well on from really IDEXX it has progress excellent. nice dogs, opinion to been leaders well turnaround a oncologists as XXXX older as as at-risk We're continue an appropriate work as screening, targeting price but on both making dogs We diagnostics being target the from standpoint, cancer the time

validate we owners being We platforms, develop testing looking data that veterinarians the -- continue and market. really are build fully collect forward both we're know So to to able the pet and product, to this see a being able therapeutic major and and numerous currently can more cancer a to obviously, the when than detect more cancer as terms point detect effective. options what's you earlier of pain earlier, have you today in done are

I And Lab touched the changed working times landscape on it it's terms turnaround you about of Reference in stuff. or of the bit how think Laboratory kind of the changes Has of sort your just a terms you're quarter, and whether should environment? Okay. anything then from and just contracting Reference But on in in know strategy, your of at on kind progression, performance and customers standpoint kind before. just any particularly volume little kind inherently also lower of service the a overnight of levels competitive kind that with testing we an side, of And quarterly general, the all? then on how in in

indicated in VetConnect in health diagnostics, really and the ] differentiation menu, Labs. think don't competitive quarter do We that and renal closely. very Reference we for the gains, cancer around the positive retention Brian We at which Aaron, high If been see the Yes. to in which overall dynamic. any growth as levels, new net track volume remain business see Labs, the look we panels very for whole The change have the us PLUS at we year. in the look well. IDEXX position earlier, continues the [indiscernible] [ Reference and coming we

expansions about putting our really corporate I win-win of and business, extensions as to differentiation of I talked partnerships the is think speak the I us corporates spoke practices contract reference well strategy. to as with partner together and to part lab independent our want

from Brandon William is The with Vazquez question Blair. next

related they're two, kind both had volumes. to of end I kind of market

maybe just both I'll so ask And them upfront.

one price, visit think and utilization tend of also volumes. disclosed that. maybe is always if part to of metrics, at over first as The I you you frequency depressed. you a little the the guys little look snapshot, ex things vet as have versus more bit your control Still those a that

is actually are? So that and worse than that what maybe volumes the offset do done you means this as is then the about guys 'XX are tests because the they medication? being just diagnostic And is on to talk you're the visits of help is switching talking a about. medication go now within around simply headwind vet are you follow-up this some pull guys NSAID pain talking Can less to you looking they're clarify if levers on second vet that have Or can headwinds just visit we utilization, injectables are less that you weaker about impact dead visit simply for that into growth. frequency pain

being Jay visits, pets So visits a recently, maybe are and [indiscernible] pain particularly your pretty there utilization few that these we're I question pain brought can an on. of can business visit is typically what a are diagnostics. medication, driving And of in point us doesn't data seeing of the insight over the ramp administration positive clarify growth, benefit the But isn't older been of number meaningful the bit expand with that contributor pain pets little that's a but where quarters, on to related diagnostic, that the there's provides terms meds, last in it more our are last there it frequency and that the is particularly and to medication. in a particularly follow-up obviously of

really minus that utilization When is business visits on is frequency is for terms interesting So X.X% that is what's to diagnostics. in to those dynamics, we're X% of X% and to turn what the business clinical for side, drive frequency up. actually highlight the adjusting you that, our minus trying

we in at basis clinic, show. to that are So from rather than coming positive historically, for we it's per it's pets for XX visit, seen we've albeit actually the well it think into -- points positive. visits be utilization And points -- what paces XX the increases see basis we as continuing minus moderated but

backdrop. that's So of kind the

focusing metrics a a us. we're underlying relates specific there's healthy. within think our the dynamic that I a investors on we Jay to dynamics for some on, think the very visit clinic can It's about talk the it focus challenge more as -- But are in really of this. and

Yes.

way our software use inVue, but Labs Reference So the IDEXX and programs, use is direct and consumables, commercial XXX our to utilization, drive Innovation programs terms and innovation we place and -- from inspire model. instruments with being utilization the through strategic in cartridges we when of influence shipping our leveraged businesses. of our a both standpoint, frequency inVue Assay really that also has testing. Rapid that the both through begin Obviously, able really impacts they'll and marketing drives and

think and clinics. using of management in diagnostics over do it's and up end business clinical within up that foundational challenging, we the we've shown where and the solve time [indiscernible] innovations you approaches because problems this -- bring both end driving services care really it's that their most historically, So terms that over customers medical time, that

is question Westenberg with from next The Sandler. Piper David

a seen is I'm year Lab utilization Lab, or on And strategy drug differential that the the to to since probably about I'm the perhaps on lab XXXX. are unpack a then we I'm next visits. because consumables biggest the But of using generate way again, and the way that after. seen. big get And to and thinking we've between inside they're that to maybe So the gap thinking maybe a saying pain seeing acceleration Reference diagnostics. groups potential that diagnostics, as more gap only about In year Reference more going ultimately, a what veterinary we're changing haven't of trying couple

of also an in about much It's of impact some around It's days. including visits, since been we've then half visits. Cytopoint. an still And seen explained pain stuff, on the impact been been on on but that fact, as drug, XXXX. You

patients be elderly diagnostics. likely sold more to are Now to

audience. there's this think would maybe that see -- they I talk when you captive love veterinary a you customers, captive So to we mean, as this audience,

because impact again, question longer And a you focus patient. as increase would So year the of on is like elderly diagnostics to -- trends. some maybe on build now utilization there tail I'm I maybe to have next we of trying these diagnostics, this

Yes.

Lab So modality We just the let the versus in-clinic see me model. shift. a about Reference talk don't actually

that based things primarily send-out just is Reference a that. modality. acute in on situational terms condition, other I haven't quickly. haven't to test, pet may the of think seen a out. that In use, number wellness well seen Lab we an we tend specialty overall a macro and they Obviously, be they'll considerations. testing, visit called mix the impacted above to by the But in cases, as if conditions of so pet. trend beyond get with But it's I visits, influence in-clinic do wellness or If actually it's veterinarians comes the out, overall is and send interpretation shift a not --

are the In in getting, impact dogs, seen would terms haven't on any of let's pain we that the diagnostics. primarily, patients older seen -- for to I let's piece, focus the practice, we of that primarily dogs, medication is use point the medication, say, those on pain and coming highlight haven't

were those think you don't more cases, if what even substitution that's driving getting in potentially or we diagnostics So at. there's effect

the the our time. this, over utilization I in of blood and that pandemic inclusion discussions, just question your growth drivers period Investor you're the a XX highlighted a XXX post-pandemic basis more not point growing upside at just seen the utilization frequently sustaining. it's And Dave, the macro we going highlighted if some that's in transition period to we've into our very actually work can business Day globally, long point with points, that but to pandemic. points XXX basis our to We we've And accelerated expansion back get accelerated know discussion. for longer-term XX in the familiar that diagnostics. in and And time XX what for was headwinds has of on metric U.S. points. strategic It's basis basis basis XXX recently this of saw at is with through

we that influence So as strategy. that our to of in some as decades of central dynamics we're so it's growth the confident with feel done accelerated encouraged and going our see we sustaining there that and long-term in pandemic the off building very well on for time and over to that ability we've macro saw

So I'll call. you now conclude for the participation of your the Thank morning. this Q&A portion

our engagement results delivering [indiscernible] and well the Diagnostics this my more once forward look while Animal secular to share supported long-term financial by organic remains sector excellent of and current space, our effective I strategy innovation executed global lead Companion progress. opportunity to growth standards care. updates you the of again, penetration quarter. customer significant against pleasure sharing us on third a an to positioned enhance growth playbook in with to opportunity, have attractive solid cycle So and IDEXX's drivers

the that, with so you. Thank call. we'll And conclude

concludes Thank call. participation. you for today's This your

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